Earnings season is back, with a couple of big names due to report this week including some of the major banks. This week we have Bank of America (BAC), Citigroup (C), Taiwan Semiconductor (TSM), Netflix (NFLX), Goldman Sachs (GS), Johnson & Johnson (JNJ), United Airlines (UAL) and UnitedHealth Group (UNH) all set to report.
Before a company reports earnings, implied volatility is usually high because the market is unsure about the outcome of the report. Speculators and hedgers create huge demand for the company’s options which increases the implied volatility, and therefore, the price of options.
